Lex Koller Explained: Buying Property in Switzerland as a Foreigner

What Lex Koller does

Lex Koller requires foreign nationals who do not hold a permanent residence permit (C permit) and are not EU/EFTA citizens resident in Switzerland to obtain authorisation before purchasing residential property. The law applies to the acquisition of houses, apartments, building land and certain commercial properties with a residential component.

The purpose of the law is to prevent excessive foreign ownership of Swiss residential property and to preserve housing availability for Swiss residents. It reflects a long-standing Swiss policy of limiting the internationalisation of the domestic property market.

Who is subject to Lex Koller

The law applies to natural persons who are foreign nationals without a C permit and who are not EU/EFTA citizens resident in Switzerland. It also applies to legal entities (companies) controlled by foreign nationals. Swiss nationals and C permit holders are exempt. EU/EFTA citizens who are resident in Switzerland are also exempt.

Non-resident EU/EFTA citizens — for example, a French national living in France who wishes to buy a holiday home in Montreux — are subject to Lex Koller in the same way as non-EU nationals.

What Lex Koller permits

Subject to authorisation, foreign buyers can purchase a holiday home in a designated tourist municipality. Montreux is one such municipality. The property must be used exclusively as a holiday home by the buyer and their family — it cannot be rented out commercially or used as a primary residence.

The property must also meet size restrictions: the net living area is generally capped at 200 square metres, and the plot area at 1,000 square metres, though exceptions exist for properties with historical authorisations.

The authorisation process

Authorisation is granted by the cantonal authority — in Montreux's case, the Canton of Vaud. The buyer submits an application before or at the time of signing the purchase contract. The notary typically handles the submission as part of the transaction process.

Authorisation is granted within the annual cantonal quota. If the quota for the year has been exhausted, the application will be deferred to the following year. In practice, buyers should confirm quota availability early in the process.

Consequences of non-compliance

A purchase made without the required authorisation is void. The property must be resold, and the buyer may face administrative penalties. Swiss notaries are legally required to verify eligibility before completing a transaction, so unauthorised purchases are rare in practice.

Key points

• Lex Koller restricts residential property purchases by foreign nationals without a C permit
• EU/EFTA residents in Switzerland are exempt
• Non-residents — including non-resident EU/EFTA citizens — are subject to the law
• Authorised purchases are limited to holiday homes in designated tourist municipalities
• Property size is capped at 200 sqm net living area
• Authorisation is granted within an annual cantonal quota